This memorandum
provides information on the Spanish National Competition Commission’s
consideration (Spanish initialism “CNC”)
regarding Royal Decree-Law 22/2012 of 20 July, implementing measures on
infrastructure and railway services (“RD-L
22/2012”).
Before analysing
the CNC’s position regarding RD-L 22/2012, we summarise the main content
of the regulation.
1. rd-l 22/2012
1.1.
RENFE-Operadora’s new structure
The purpose of
article 1 of RD-L 22/2012 is to restructure RENFE-Operadora by
integrating all its services into four State companies, which will be
wholly owned by RENFE-Operadora. Consequently, each of the companies
will assume some part of RENFE-Operadora’s current functions (directly
or through other companies in which it holds a stake).
The corporate
purpose of the four State companies, which will be held by
RENFE-Operadora will involve, at least, the following functions and
obligations:
a.
RENFE-Operadora’s current functions and obligations in its travel
business unit and operational area.
b. The
functions and obligations that RENFE-Operadora’s goods and logistic
area currently carries out, as well as those carried out by its sole
shareholder companies Multi RENFE Mercancías, S.A. (the purpose of
which is to operate multiproduct, bulk, solid and liquid transport
services), Irion RENFE Mercancías, S.A. (the purpose of which is to
operate railway services for the transport of steel goods) and Contren
RENFE Mercancías, S.A. (the purpose of which is the transport of
intermodal transport containers).
c.
RENFE-Operadora’s current functions and obligations in its rolling
stock production and maintenance business and operational area.
d. The
implementation of leasing activities and other activities linked with
rolling stock assets including, subsidiarily, promoting sales and
availability.
1.2.
Dissolution
of the public company Ferrocarriles Españoles de Vía Estrecha (Spanish
initialism, FEVE)
Article 2 of
RD-L 22/2012 establishes the dissolution of the public company
Ferrocarriles Españoles de Vía Estrecha (FEVE) (in English,
“Spanish narrow-track trains”) as from 31 December 2012, according to
the Fifth Temporary Provision of Law 39/2003 on the railway sector,
which was operating the metric width network (different from the
conventional Iberian width network). It is a State-owned company
pursuant to its articles of association enacted by Decree 584/1974.
1.3.
Liberalisation of passenger rail transport services
Rather than wait
for European legislation to regulate the liberalisation of the sector,
article 3 of RD-L 22/2012 declares the opening of passenger rail
transport services to the market through the General Interest Railway
Network (Red Ferroviaria de Interés General) beginning on 1
August 2013.
Therefore, as
from that date, companies holding the corresponding railway licence and
railway safety certificate may request infrastructure capacity to
provide internal transport railway services through the General Interest
Railway Network.
In any event,
once the passenger railway transport market is liberalised,
RENFE-Operadora will retain the right to operate the network capacity
that it is effectively operating as at 31 December 2012, and may even
request further network capacity as established in the railway
regulation.
1.4.
Other
measures regarding railway infrastructure and services
In addition to
the abovementioned measures, RD-L 22/2012 establishes the following:
1.4.1.
Viability of
specific railway infrastructures
The information
provided by the Ministry of Public Works reveals a clear underuse of
certain railway infrastructures. In many cases, following the procedure
established in article 11.3 of Law 397/2003 on the railway sector, the
railway service currently offered by these infrastructures will be
closed down and their services cancelled.
1.4.2.
Restructuring of middle distance railway services
Closely linked
to the viability of the railway infrastructures, RD-L 22/2012 urges the
Ministry of Public Works to issue a proposal before 31 December 2012
regarding mid distance railway services that are not considered public
service obligations. That said, apart from those routes that are
considered public service obligations, it is likely that many mid
distance transport lines will be cancelled.
1.4.3. Local and regional railway service governed by the autonomous
regions
Within the scope
of the liberalisation of the national transport of passengers, which
will enter into force on 1 August 2013, article 4 of RD-L 22/2012 states
that autonomous regions that hold State functions of local and regional
passenger railway services through the Iberian width railway network may
establish the provision of these services according to the applicable
regulations and Regulation (EC) 1370/2007 of 23 October of the European
Parliament and of the Council.
Finally, RD-L
22/2012 justifies the legislative procedure followed for its enactment
(Royal Decree-Law) based on the celerity and urgency of the measures to
be adopted within the context of the Spanish financial crisis.
2.
Considerations of the cnc
At its meeting
of 5 September 2012, the Council of the CNC issued an opinion on how
these provisions and others regulated under RD-L 22/2012 could affect
the Competition Law. The CNC indicated its preference toward the
liberalisation of the railway sector in Spain, although it criticises the
regulation’s content and how it was enacted. The CNC stated that the
regulation is unsuccessful in fulfilling its purposes because it falls
short of what is required and contains inaccuracies.
Firstly, the CNC
is critical of the legislative procedure through which RD-L 22/2012 was
enacted, suggesting that the urgency of the measures has not been duly
justified. It is important to take into consideration the fact that the
procedure to enact RD-L 22/2012 was based on the celerity and urgency of
the measures to be adopted within the framework of the Spanish financial
crisis, in particular, to fulfil the budget stability objective set by
the government.
Likewise, the
CNC comments on the insufficiency of the reform, as it understands that
it is not possible to undertake the objectives merely with the
provisions implemented. The following measures are mentioned as not
having been addressed: the avoidance of barriers to entry and expansion
caused by the current structure of the different fees; reduction of the
difficulties to access the market; and the removal of RENFE-Operadora’s
advantages over other operators, by virtue of the “grandfather clause”,
according to which RENFE-Operadora will continue to be able to operate
the network capacity that it uses upon liberalisation, to the detriment
of other operators.
The CNC also
commented on the following specific issues:
- The CNC valued
the new business structure of the State company RENFE-Operadora
positively. Nevertheless, it points out that this will prove
insufficient, as the independence of each of the companies must be
present at all levels –accounting and operational- as well as formal and
legal. Therefore, the link between the new companies and the Ministry of
Public Works could be removed to allow the entry of private capital,
which would be different for each company, avoiding, in this case,
conflicting interests. Indeed, it should be highlighted that RD 22/2012
does not anticipate the privatisation or the entry of private funds in
the capital of the new companies that will be dependent on
RENFE-Operadora, as the regulation states that their share capital will
be wholly owned by RENFE-Operadora.
- With respect to
the possibility of the autonomous regions deciding the regime applicable
to local travel, the CNC states that this competence only applies to
passenger travel and not to the transport of goods. Therefore, it states
that the regulation should be more comprehensive in order to favour the
provision of the service in the most competitive way.
In conclusion,
and in the opinion of the CNC, “the legislative reform has been
implemented expeditiously and partially in a sector that needs a
thorough transformation”. The CNC reiterates that it is preparing a
“study of the transport of goods by rail”, in which it will set out its
general view of the sector, including recommendations on the same.
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